The rise in fraudulent tenant applications
Fraudulent tenant applications cost you a lot. They can damage your reputation, reduce the level of rent you can charge, delay any investment and create additional legal fees.
The economic crisis has brought a lot of challenges to landlords. It’s hard to find good tenants, let alone the right tenant. Credible, reliable and trustworthy tenants can be hard to come by these days. Because of that, it's an unfortunate fact that false applications are common during a time of economic crisis.
Some people falsify their rental application to secure property in a difficult market, others do so because they can't afford the rent. Every landlord has a right to ask for information about tenants before signing a lease; make sure you're not taking any unnecessary risks by renting to fraudulent tenants.
Research by Homeppl, one of the leading tenant referencing providers, has confirmed that 91% of the fraud they flag in UK rental applications stems from applicants attempting to conceal their true affordability by modifying original financial documents or creating completely fake ones. The most common lies are people claiming a higher income than is actually accurate, but many also try to hide unpaid credit card debts or other liabilities.
Rogue tenants are a problem for many landlords and agencies in the UK, as they can cost a significant amount of money to evict. The cost of evicting a rogue tenant is often tens of thousands of pounds, and doesn’t include the costs associated with damage to the property or lost rent during the eviction process.
Because the risk of fraud is greater in the current economic climate, it's important for landlords to be vigilant about who they let into their properties. There are a number of steps you can take as a landlord to minimise your risk of being scammed, such as running thorough checks on tenants to ensure they are who they say they are. Requesting a tenant to provide a guarantor on application is also a trend on the rise and may be something to consider when choosing a tenant.
Another consideration for landlords if you haven’t already, is joining the Elliot Leigh Guaranteed Rent scheme. Specifically in this scenario, because your property is managed by us, with maintenance and repair taken care of. But most importantly, your rent will always be paid to you, meaning there is zero risk of rent arrears or defaults.
The average rent in London is still currently above £2,000 per month. If a tenant defaults 6 months into a 2 year lease at that price, this leaves the landlord out of pocket by £36,000 in rental costs alone, not forgetting any eviction costs that may be added on. By joining the Elliot Leigh Guaranteed Rent scheme, this eliminates any of these costs.
To find out more about us, get in touch today.